On 2 October 2026, the Italian Council of State (Consiglio di Stato) issued two significant rulings addressing whether tax credits (crediti d’imposta) can be considered as reducing the labor cost component in public procurement tenders. The issue arises because Italian public contracts law requires bidders to demonstrate that their offered labor costs are not abnormally low, typically by referencing collective bargaining agreements. The Council held that tax credits which are certain, liquid, and compensable against specific tax debts (e.g., IRPEF withholding tax credits, R&D tax credits) can be deducted from the gross labor cost to arrive at the net cost borne by the employer. However, uncertain or non-compensable credits (e.g., future credits, credits subject to discretionary approval) cannot be used.
Key Takeaways
- Certainty and Compensability as Key Tests: The rulings establish a two-pronged test: the tax credit must be legally certain (arising from a consolidated right, not a mere expectation) and immediately compensable via F24 against existing tax liabilities of the same taxpayer. Credits pending verification or subject to annual budget allocation fail this test.
- Impact on Abnormally Low Tender Assessment: Contracting authorities must accept certified tax credits as reducing the declared labor cost. This lowers the risk of exclusion for bidders who heavily rely on labor cost incentives (e.g., hiring incentives, training credits). However, bidders must provide the tax credit certification (certificato crediti) and the F24 compensation receipts as proof.
- Practical Guidance for Bidders and Advisors: Companies preparing bids should inventory all applicable tax credits, verify their compensability status, and prepare the documentation trail. Tax advisors should issue comfort letters on the credits’ certainty. The rulings also clarify that the tax credit reduces the cost for the purpose of the “congruity” check but does not affect the minimum wage floors set by collective agreements.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement